A forum for associates to speak out about law firm issues

The relationship between competency and layoffs / firings

I’d like to go back to an issue that I touched upon in an earlier post but didn’t address fully: the relationship between competency and firings.

It’s a well-known fact that there are more associates fired from their jobs (asked to leave, asked to resign, forced out the door — whatever you want to call it) during bad economic times than good. But when someone is fired, as opposed to being “laid off,” there is supposed to be a difference that goes beyond semantics. Being fired means that it was done “for cause”; in other words, an associate was either not sufficiently competent or had major personality issues that couldn’t be resolved. For simplicity’s sake, we’re only dealing with competence today, and will save the personality topic for a future post.

On the other hand, being “laid off” means that the firm had to let go of otherwise competent associates for business reasons: namely, to protect partner profits during an economic downturn. Law firms are, after all, businesses, and partners aren’t going to keep 100 associates around when there is only work to keep 70 associates busy.

But when firms decide to do a round of layoffs, how do they decide who to let go? If the calculus has nothing to do with competency, then what is the criteria used to make such decisions? On the flip side, if an associate was “safe” from being fired during booming economic times, but was later on fired for incompetence during a recession, was incompetence really the straw that broke the camel’s back?

It appears that the relationship between competency and layoffs / firings is not so simple. Nor is the distinction between a layoff and a firing particularly clear or well-defined. In theory, one can make pretty definitions about what a layoff is (not related to competence) and what a firing is (based on incompetence). In practice, these definitions are about as useful as a solar-powered flashlight with no battery.

The reality is that during times of boom, the money is rolling in so fast that relatively little attention is paid to associate competence. There is so much work to do that partners can’t find the warm bodies needed to staff their cases. Partners become desperate for additional help, because they hate to turn down cases on the basis of insufficient resources.

In times of plenty, an associate who is marginally competent can remain under the radar for months, even years, at a large law firm for several reasons. First, the volume of work usually means that a particular associate who may not be able to handle the responsibility indicative of his “level” or “year” may well be useful doing entry-level work. During boom times, work is coming in so quickly that having anybody being able to pitch in on any task is useful. Second, there is so much money flowing in that neither partners nor clients tend to scrutinize the bills as carefully. Client representatives who are in-house counsel at major Fortune 500 companies aren’t particularly concerned when the company is raking in record profits. Partners are also less concerned because their clients don’t care as much, and because the firm is rolling in dough. Thus, it’s possible for an associate to bill inefficiently for extended periods of time with no one — partner or client — realizing what is happening. Third, mistakes made by an associate tend to be minimized when a partner is happy with her slice of the pie. Generally, that’s how the world works: when everyone is rich and happy, no one complains. Crumbs are swept under the rug. Warts are airbrushed. Perception works in mysterious ways.

In lean times, like what we see happening today, the opposite is true. Associate competence gets placed under a microscope, because there isn’t enough work for everyone. Partners and senior associates hog most of the work, and junior associates are left to fight over the scraps. Not having work during bad economic times is like wearing a scarlet letter on your forehead. You’ve been branded, whether rightfully or not. The assumption is that you don’t have work because you’re incompetent. This starts a vicious cycle where the perception turns into reality as partners avoid giving you work based on the perception that exists. In addition, bills are scrutinized by clients to the most minute detail, and in turn, partners seek to ferret out any signs of inefficiency. In times of bust, partners look at associates as “dead weight” — while associates make the same salary in good times and bad, the partners make far less when the economy tanks. Suddenly, the income gap between partners and associates have narrowed considerably, usually a sore point with partners. And if an associate is only working 50% to 70% at full capacity, the partner wonders why she’s paying this associate a full income. With that perspective, partners tend to “look” for flaws, any reason at all to pitch the dead weight overboard.

So, the conclusion to all this is: the perception of competency changes with the economic times, and that perception–regardless of the reality–will have more of an impact on you keeping your job than any measure of your true competency.